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By the traditional Retail Prices Index measure of inflation, George Buckley, economist with Deutsche Bank, expects December’s figure for annual inflation to have been 3.2 per cent, up from three per cent in November.

Government statisticians last week decided not to change the composition of RPI in a move that would have lowered the rate.

Pensioners are among the winners from the decision, as they will continue to see their benefits rise by a higher amount. But retailers, whose business rates are also benchmarked against RPI, are among the losers.

They criticised the Government’s business rate policy as ‘inherently flawed’ and renewed calls for a review of the way that increases are dictated.

In a report, the Office for National Statistics criticised the RPI index. It said that the method of calculating RPI ‘would not be chosen were ONS constructing a new price index’.

The method of calculating the increase in rates has also been criticised because it uses one month, September, which is often anomalously higher than other months.

A spokesman for the British Retail Consortium said: ‘A review of the system is even more pressing now, given the process undertaken by the ONS acknowledged that the existing measure of RPI is inherently flawed.’

The BRC has backed Financial Mail’s year-long campaign to review the way business rates are measured as high street retailers face increasing competition from the internet and the number of empty shops continues to rise.

April’s increase in business rates will take the three-year cumulative rise to 13 per cent.
At the same time consumers have seen inflation outstrip rises in earnings. In 2010, the CPI rose by 3.7 per cent while average pay rose 2.3 per cent. In 2011, a 4.2 per cent rise in the CPI was accompanied by a two per cent increase in pay.

The most recent figures for 2012, for the 12 months to October, show a 2.7 per cent CPI increase and a 1.7 per cent rise in pay.

Buckley said: ‘Inflation has proved a lot stickier than you would have thought. It is surprising that the rate has stayed so high during what have been recessionary conditions.’